Awesome Penny Stocks – the walls come tumbling down

25 Oct Awesome Penny Stocks – the walls come tumbling down

Last week we wrote a report about the breaking news of Awesome Penny Stocks closing down its doors. In the days that have followed some major details have been coming to light that help verify information posted by yours truly way back in 2011 about the main individuals behind Awesome Penny Stocks and bridges the "old regime" to the "new regime" helping to give us a much clearer picture of the entire Awesome Penny Stocks cartel.

All old IHUB posts that mentioned the names John Babikian and/or Robert Kalfayan as Awesome Penny Stock insiders were removed some time in 2012 including several of my posts. I've been having a discussion about it with the IHUB admins and through hours of research, they were able to piece together details about the how the posts were removed. In March of 2012, the IHUB received a Cease and Desist letter from attorney Leonnel Iruke (more on him later in this report) demanding that a specific list of posts be removed from the IHUB website. In the Cease and Desist letter Leonnel Iruke threatened to file legal charges against 3 IHUB posters including yours truly. The IHUB refused to give in to the demands of the Cease and Desist letter and remove the posts. Not satisfied by the response from the IHUB, some time over the next few weeks the IHUB website was hacked and the targeted content was deleted through an old exploit that doesn't exist anymore. All of the posts that were included in the Cease and Desist letter were removed through the hacking. The posts all included the names John Babikian, Eric Van Nguyen, Jad Tabara (aka Jad Tabari), or Robert Kalfayan. Several posts that I authored on the IHUB starting in December of 2011 naming these individuals (mainly Babikian and Kalfayan) as key Awesome Penny Stock insiders were part of the maliciously removed posts. I'm told once the exact nature of how the posts were removed is solved the posts will be restored and I'll be able to link them into this report. In 2011 I also sent my research naming John Babikian and Robert Kalfayan as key Awesome Penny Stock insiders to the FBI and SEC who obviously didn't use the information for any immediate action.

Basically what I found in December of 2011 is that Robert Kalfayan authored many of the early spam emails sent out by Awesome Penny Stocks and the Awesome Penny Stock sites were all hosted on a server that was owned by John Babikian. Robert Kalfayan had a history of spam. He was named with his brother, Jirayr, in litigation for his role in an illegal spam operation in 2005. John Babikian was already involved in his own website business called bargainoo.com as well as some porn sites. Rumor had it that the Awesome Penny Stock mailing list was built from the old Skymark Media mailing list and then added to through the use of sites owned by John Babikian and the hacking of other sites to obtain their mailing lists.

John Babikian worked hard to keep his name a secret. Besides hacking the IHUB to have posts mentioning him removed through some exploits he also threatened a lawsuit and pressured Seeking Alpha to take down an article about Awesome Penny Stocks written by infitialis that included the names John Babikian and Robert Kalfayan. That unedited report can still be found at this link.

The following are pictures of John Babikian (bald head bottom left in the first and on the right in the second and third). The second and third photos were provided courtesy of Le Journal de Montreal:

Robert Kalfayan is the one on the left in the following photo:

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Yesterday evening fellow stock sleuth and researcher, infitialis, was able to gain access to the sealed Quebec court documents filed by Babikian's wife, who is suing her husband, John Babikian, for divorce and was kind enough to pass those very revealing court documents on to me. View those court documents HERE. In those court documents, Babikian's wife discloses her husband made over $100 million running Awesome Penny Stocks and also exposes several of his off shore accounts and business practices including the following:

Middlebay Trade Ltd incorporated by Babikian in the Seychelles holds a secondary residence located at 642 N. Laurel Avenue, Los Angeles, California. The Laurel Avenue house was purchased in December 2010 for $2.2 million and is now estimated by Zillow to be worth $2.7 million.

Oriwa Villas Ltd holds for Babikian his property located at 1401 Londonberry Pl, Los Angeles, California. The Londonderry house was purchased in March 2012 for $6 million and is currently estimated to be worth $10.5 million by Zillow.

Arrow Import & Export Corporation incorporated by Babikian in the British Virgin Islands holds bank accounts for Babikian at Hong Kong HSBC believed to be his principal accounts.

John Jack Ventures Ltd which is incorporated in the Bahamas and holds Babikian's seven condos located at The Reef Atlantis, in Nassau, Bahamas. Babikian used an alias John Jack to make the purchases.

9264-5076 Quebec Inc which holds three lots located in Le Domaine des Berges, Laval, Quebec that Babikian acquired to build a new family residence.

9224-1249 Quebec Inc [Bargainoo Inc] is a company that is related to domain www.bargainoo.com created and operated by Babikian

Vertical International Relief Fund is an account used by Babikian for flying around the world in a private Gulfstream jet.

Tidal East Global Relief Fund holds shares of Energy Telecom (ENRG) for Babikian (I had a post about Babikian's share ownership in ENRG on the IHUB that mysteriously got removed along with all other posts named John Babikian and/or Robert Kalfayan as Awesome Penny Stock insiders). On May 14, 2012, ENRG became the subject of an "APS fakeout promotion" and saw a giant intraday spike in price. My post about this "APS fakeout" linked to Babikian and Kalfayan has now been restored and can be seen here.

Antica Ventures Ltd which holds a bank account for Babikian at the Belize Bank International Limited in Belize and shares in the company WOW Brands.

One Berger Circle Holdings was used by Babikian to funnel money in order to build the family residence located at 445 des Anemones, Laval, Quebec

Mediasky Holdings Ltd is a company recently incorporated in Belize by Babikian

Liner Investments Ltd is a company recently incorporated in Seychelles Island by Babikian

Intelligent Alliance Corp is a company recently incorporated in Seychelles Island by Babikian

Aurora Intour Ltd is a company recently incorporated in Seychelles Island by Babikian

Microtech Ventures Limited held bank accounts for Babikian

9248-3247 Quebec Inc holds the pent house condominium located at 1300 Alain-Grandbois #702, Montreal, Quebec which was previously owned by Babikian but later ownership was transferred to an associate of Babikian named Alexandre Salameh who was possibly acting as a nominee for Babikian

Besides his love for luxury homes and luxury condos, Babikian also splurged his ill gotten gains on cars. His collection included a 2008 Bugatti Veyron (the fastest and most expensive car in the world), a 2010 BMW X6, a 2010 Lamborghini Gallardo, and a 2010 Bentley Continent, estimated to be worth C$1.5m.

Babikian's wife also claims that Babikian has formed or is in the process of forming companies in the Bahamas, the Seychelles Islands, St. Kitts, Nevis, Panama, Hong Kong, the British Virgin Islands, and Belize among possibly many others. Babikian's wife told the courts that John Babikian is in the process of founding a bank in Guatemala so that he will be able to conduct banking transactions with impunity and not face expulsion by legitmate banks that do not want to handle his large and unexplained transactions. Babikian has already been expelled by the Royal Bank of Canada, HSBC in Switzerland, and the Bank of Montreal.

The court document lists the following bank accounts connected to John Babikian (which are no doubt only a portion of the accounts in controls around the world):

In the court document, Babikian's wife says that Babikian fled Canada around one year ago moving to Monaco. Babikian applied for citizenship in several countries and is currently a citizen of Canada, Lebanon, Nevis, and Guatemala. She fears that between his personal jet and multiple citizenships that he will now be nearly impossible for authorities to catch. And just imagine, back in 2011 when some of my information about Babikian was first being sent to the authorities, Babikian could have easily been picked up right in Montreal or Los Angeles.

Also interesting in the court document is that Babikian's wife talks about how Babikian declared Bankruptcy for two of his four companies he owned in Quebec during a 2010 audit conducted by the Minister of Revenue of Quebec. As part of that Bankruptcy, Babikian came up with $550,000 in debt for 9173-8153 Quebec Inc ($300,000 was listed as being owed to Leonnel Iruke and the other $250,000 owed to a company called Nick Thomas Ltd) and $175,000 in debt for 9195-5948 Quebec Inc all owed to a company allegedly located in Florida called First Spectacle Corp.

Leonnel Iruke is the same attorney that sent the IHUB a Cease and Desist letter to try to get posts naming John Babikian and his associates removed from the IHUB. His name is another name that has shown up often in our research reports. Iruke was an insider for former APS pick, MILV, as well as the attorney that represented Awesome Penny Stocks in two separate lawsuits. See reports located here, here (including comments), and here for more details. Leonnel Iruke operates under the legal name Omnisource Legal Group. Babikian's wife says that Leonnel Iruke is John Babikian's personal attorney and works almost exclusively for John Babikian making him readily available to jump on a plane and meet Babikian in any part of the world at the drop of a hat. Leonnel Iruke's partner, Emeka Uyamadu, has a criminal conviction and had his license to practice law suspended. Last year Emeka Uyamadu was disbarred.

Babikian's wife says that Michel Gauthier is John Babikian's personal attorney in Quebec and that Gauthier would often help Babikian channel money through Gauthier's trust account.

A similar but less detailed court document was also filed by Babikian's wife in California.

All this week Montreal reporter,Jean-François Cloutierhas been doing articles disclosing information about John Babikian and the lawsuit against him. I had the pleasure of communicating with Mr. Cloutier some before the articles came out.

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According to the indictment and documents filed in court, between April 2009 and May 2012, ANTHONY THOMPSON, 38, ERIC VAN NGUYEN, 30, and JAY FUNG, 40, acted as a penny stock promotion team that conspired with individuals in control of public companies to “pump-and-dump” the companies’ stock. The promoters controlled numerous penny stock websites, including OxofWallStreet.com, PennyPic.com, and MonsterStox.com, from which they sent email blasts promoting the stocks to thousands of potential investors. With an agreement in place that the promoters would blast emails “pumping” the stock, participants in the scheme allegedly acquired public shell companies with available shares into which they merged newly-created private companies. Once they obtained control of the public shell companies, corporate insiders are then accused of transferring and issuing millions of free-trading shares to themselves, their associates, friends, and family members, in order to control the supply of those shares and drive up the price of the stock during the upcoming promotional campaign.

With millions of shares in the hands of the defendants and other participants, THOMPSON, VAN NGUYEN and FUNG coordinated with corporate insiders to issue press releases as part of their promotional campaigns. Potential investors received false and misleading emails encouraging them to purchase shares in the companies. As demand for the stock rose and drove up the market price, the defendants and other participants are charged with liquidating, or “dumping,” their own shares, while ceasing to email promotional materials. As a result, the price of the stock abruptly plummeted, leaving public investors with nearly worthless stock.

In and around 2010, as the Securities and Exchange Commission began investigating several of these public companies, THOMPSON, VAN NGUYEN, and FUNG went to great lengths to conceal their ownership of shares of Smart Holdings, Inc. Having initially coordinated with other conspirators to structure the transfer and issuance of shares into their own names and into the names of other conspirators, THOMPSON later contacted other participants in the alleged scheme and instructed them to cancel those issuances. He allegedly directed them to have the shares issued in the names of five entities, four of which were foreign corporations, including White Frog, Ltd., to conceal the promoters’ ownership of these shares. The shares were further transferred into the name of a foreign broker-dealer, Gibraltar Global Securities, and when the shares were “dumped” for huge profits, the proceeds were wired to a California law firm, before finally being transferred to bank accounts controlled by THOMPSON, FUNG and VAN NGUYEN. However, the promoters’ email blasts touting the company’s stock falsely stated that each had been compensated by an unaffiliated third party named Best Fortune Marketing.